Behind Closed Doors, China Grapples with Autonomous Vehicle Policy

Robin Li, the co-founder and CEO of Baidu Inc., caused a stir this July when he addressed a tech conference audience from the back of a Baidu autonomous car as it drove him around Beijing. The audience was impressed with the stunt, but controversy arose the next day when the Beijing Bureau of Traffic Management announced it was launching an investigation into the incident. China has yet to introduce laws or legal guidelines for autonomous vehicles so it is unlikely Li will face any charges. Two days after Li’s incident, the State Council of China published a roadmap for how China could become the global nexus for artificial intelligence by 2030. Although China has yet to pass autonomous vehicle (AV) legislation, behind the scenes Chinese lawmakers are moving to adopt uniform standards on AV testing to prepare for eventual widespread commercialization.

Evidence obtained from industry insiders and high-level documents suggest China is in the process of developing national AV legislation. Developments in China come as the U.S. has taken the lead in this space. The U.S. House has already passed AV legislation, and the Senate has moved a bill out of committee and is on the verge of passing its own national AV law to create a comprehensive framework for the safe deployment of AVs, while American tech and auto companies are pouring money into testing and investment in self-driving technology.

A number of major Chinese companies, including five automakers, telecommunications giant Huawei, and Baidu, have invested significant resources in the research and development of AVs.

A number of major Chinese companies, including five automakers, telecommunications giant Huawei, and Baidu, have invested significant resources in the research and development of AVs. One major milestone occurred last year when two of Changan Automobile’s AVs completed a 1,200-mile journey from Chongqing to Beijing. A government news release lauding the event is one of the only documents regarding AVs on the official government website. Despite the lack of details, the country is moving forward with AV policy. For instance, Bloomberg reported last year that the Chinese Ministry of Industry and Information Technology (MIIT) prepared a preliminary draft of AV testing rules—but those guidelines remain unpublished.

A number of developments suggest the government is nearing a comprehensive AV plan.

Last year, the Chinese State Council published a Five-Year Plan (FYP) for national scientific and technological innovation development. One section mentions that the development of self-driving cars is a national priority for all administrative units of Chinese society.

In April, MIIT published an official book list for agency party members to read. The second book on the list is Luke Dormehl’s Thinking Machines: The Quest for Artificial Intelligence—and Where it’s Taking Us Next. Dormehl’s Thinking Machines addresses a wide range of artificial intelligence based topics, including AVs.

In June 2017, an editorial published in the national media stated that standardization of technologies and development of smart cities could facilitate the orderly operation of AVs.

Finally, and perhaps most significantly, in July the State Council published a comprehensive plan for the development of artificial intelligence (AI) technologies.

Along with an exhaustive list of AI and data-enabled technologies, the State Council plan states that China has laid “an excellent foundation” for the development and implementation of AV technology while referencing a three-year plan set to begin in 2018. The document concludes with practical steps for deploying the listed technologies and states that the central government should create a legal and ethical framework to facilitate the safe development of new technologies. It is unclear when the Chinese government will publish specific legislation, particularly given the secrecy surrounding the Chinese Communist Party’s (CPC) strategy and intentions. Still, all indications suggest legislation that supports the safe development of AI-enabled technologies is an immediate priority as well as a long-term political ambition of the government.

A timeline—established by the National Reform and Development Commission (NRDC)—calls for China to set up a framework that fosters the safe and timely development of AI technologies by 2018.

There are a few important details that suggest AV legislation will be implemented soon. First, a timeline—established by the National Reform and Development Commission (NRDC)—calls for China to set up a framework that fosters the safe and timely development of AI technologies by 2018. China’s national government rarely sets targets that it cannot “hit” before the final date in order to foster an image of efficiency.

Second, Baidu has announced plans for a self-driving car to reach the market by 2018, but in limited environments. In China, firms like Baidu closely cooperate with the Chinese government on data and censorship and enjoy close insider relationships with regulators. Baidu’s Li served on the Chinese People’s Political Consultative Conference, a political advisory board to the national government. Baidu’s leaders may know details about the administrative timeline that outsiders do not.

Finally, AV legislation could be announced in the wake of the 19th National People’s Congress (NPC) of the CPC as a facet of the “new era” that President Xi Jinping spoke of in his opening speech this week. If no legislation is proposed this year, then the 2018 plenary sessions of the congress (scheduled in February and October) could be politically advantageous times to launch AV legislation and trial programs.

Testing different AV technologies and rules at the provincial level can help the Chinese government and CCP leadership decide on the parameters of a final national framework.

Historically, Chinese leadership tests unproven ideas regionally before implementing them on a national scale. Testing different AV technologies and rules at the provincial level can help the Chinese government and CCP leadership decide on the parameters of a final national framework. Baidu has said it would offer a market AV in 2018 in certain environments, which could mean the company expects to run different trials in set test areas before being allowed to launch to all of China by 2020.

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The Fuse is an energy news and analysis site supported by Securing America’s Future Energy. The views expressed here are those of individual contributors and do not necessarily represent the views of the organization.

Issues in Focus

Safety Standards for Crude-By-Rail Shipments

A series of accidents in North America in recent years have raised concerns regarding rail shipments of crude oil. Fatal accidents in Lynchburg, Virginia, Lac-Megantic, Quebec, Fayette County, West Virginia, and (most recently) Culbertson, Montana have prompted public outcry and regulatory scrutiny.

2014 saw an all-time record of 144 oil train incidents in the U.S.—up from just one in 2009—causing a total of more than $7 million in damage.

The spate of crude-by-rail accidents has emerged from the confluence of three factors. First is the massive increase in oil movements by rail, which has increased more than three-fold since 2010. Second is the inadequate safety features of DOT-111 cars, particularly those constructed prior to 2011, which account for roughly 70 percent of tank cars on U.S. railroads. Third is the high volatility of oil produced from the Bakken and other shale formations, which makes this crude more prone towards combustion.

Of these three, rail car safety standards is the factor over which regulators can exert the most control. After months of regulatory review, on May 1, 2015, the White House and the Department of Transportation unveiled the new safety standards. The announcement also coincided with new tank car standards in Canada—a critical move, since many crude by rail shipments cross the U.S.-Canadian border. In the words DOT, the new rule:

Since the rule was announced, Republicans in Congress sought to roll back the provision calling for an advanced breaking system, following concerns from the rail industry that such an upgrade would be unnecessary and could cost billions of dollars. The advanced braking systems are required to be in place by 2021.

Democrats in Congress have argued that the new rules are insufficient to mitigate the danger. Senator Maria Cantwell (D-WA) and Senator Tammy Baldwin (D-WI) both issued statements arguing that the rules were insufficient and the timelines for safety improvements were too long.

The current industry standard car, the CPC-1232, came into usage in October 2011. These cars have half inch thick shells (marginally thicker than the DOT-111 7/16 inch shells) and advanced valves that are more resilient in the event of an accident. However, these newer cars were involved in the derailments and explosions in Virginia and West Virginia within the past year, raising questions about the validity of replacing only the DOT-111s manufactured before 2011.

Before the rule was finalized, early reports indicated that the rule submitted to the White House by the Department of Transportation has proposed a two-stage phase-out of the current fleet of railcars, focusing first on the pre-2011 cars, then the current standard CPC-1232 cars. In the final rule, DOT mandated a more aggressive timeline for retrofitting the CPC-1232 cars, imposing a deadline of April 1, 2020 for non-jacketed cars.

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DataSpotlight

The recent oil production boom in the United States, while astounding, has created a misleading narrative that the United States is no longer dependent on oil imports. Reports of surging domestic production, calls for relaxation of the crude oil export ban, labels of “Saudi America,” and the recent collapse in oil prices have created a perception that the United States has more oil than it knows what to do with.

This view is misguided. While some forecasts project that the United States could become a self-sufficient oil producer within the next decade, this remains a distant prospect. According to the April 2015 Short Term Energy Outlook, total U.S. crude oil production averaged an estimated 9.3 million barrels per day in March, while total oil demand in the country is over 19 million barrels per day.

This graphic helps illustrate the regional variations in crude oil supply and demand. North America, Europe, and Asia all run significant production deficits, with the Middle East, Africa, Latin America, and Former Soviet Union are global engines of crude oil supply.